Frasers Centrepoint Trust is Firing Well on All Fronts

frasers centrepoint fct

Increased rental and initial contributions from Changi City Point, which was acquired in June 2014, upped revenue and net property income for the third quarter at Frasers Centrepoint Trust (SGX: J69U).

FCT is the owner of six retail malls – Causeway Point, Northpoint, Changi City Point, Bedok Point, YewTee Point and Anchorpoint – in our sunny island. The sponsor of FCT is Frasers Centrepoint (SGX: TQ5). Frasers Commercial Trust (SGX: ND8U) and Frasers Hospitality Trust (SGX: ACV), which invest in commercial assets and hospitality assets respectively, are also sponsored by Frasers Centrepoint.

For the three months ended 30 June 2014, FCT’s gross revenue went up by 3.1% year-on-year to S$41.2 million while net property income improved by 2.4% to S$29.1 million. The growth was mainly due to rental step-ups of current leases, better rental rates achieved for new and renewed leases, and maiden contributions by Changi City Point, which is near the Expo Mass Rapid Transit station.

Dr Chew Tuan Chiong, Chief Executive Officer of the Manager of FCT, was upbeat about the quarter. He commented:

“We are pleased that FCT has delivered another good set of results and the DPU of 3.022 cents is a new-high for a quarter. The addition of Changi City Point strengthens FCT’s presence in the suburban retail market here and it is DPU-accretive.”

FCT’s distribution per unit (DPU) of 3.022 Singapore cents for the quarter translated to an increase of 6% compared to the previous year’s pay-out of 2.85 Singapore cents.

As of 30 June 2014, the REIT’s gearing level was at 30.2% while its average borrowing rate stood at 2.49%. This was a mixed performance over the prior sequential quarter when its gearing ratio and average borrowing rate came in at 27.7% and 2.72% respectively.

FCT’s portfolio occupancy advanced to 98.5% from 96.8% in the previous quarter. Causeway Point, which contributed the bulk of the REIT’s gross revenue with revenue of S$19.7 million, registered the strongest shopper traffic growth of 9%. The second highest contributor of gross revenue at S$12.4 million, Northpoint, saw a 2% increase in its shopper traffic.

Dr Chew added more comments:

“We expect FCT’s portfolio occupancy and rental rates to remain sustainable. The outlook for the retail market is expected to remain stable, given the trends in the growing median household income and sustained low unemployment rate.”

FCT’s units closed at S$1.98 on Tuesday. It is trading at 1.1 times its current net asset value of S$1.78. The REIT’s distribution yield comes up to 5.7%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.